Why such high CL's? and more questions...

[Anonymous]

I'll second the "if you travel frequently" argument. Upcoming trip to New Orleans for my cousins wedding blew past my chase 4k signup spent threshold in a single transaction & was 90% of my available limit. Apparently I was delusional to think I could get my son a discounted toddler ticket lol

[iced]

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@Anonymous wrote:

Hello,

New here and have spent the past year slowly rebuilding my credit. After a lot of googling for information, I always wind up back here as you all are such a wealth of information. 

In my 20's I abused credit, was very irresponsible, filed BK and divorced. Now in my 50's, for the first time since my divorce, I now have credit cards, but low balances, which help me manage low expenditures, but these low balances also give me small LTV ratio's, which are keeping my scores down (I'm assuming, I haven't pulled my fico's out lately, just using credit karma which i know is not totally accurate).

Question 1: In reading the forums here, it seems the goal is to have extremely high CL's...i'm wondering why, if its so important to keep low balances, why do we want five digit cl's? other than the fact that i'm finding obtaining credit my new addiction, we are working towards decreasing debt so why increase credit.?..

Question 2: In the next few months I plan to close my Credit One account. I've read in the past closing accounts hurts your score, is this true? To what extent and for how long?

Question 3: When I reach a 700 score I plan to apply for another card, an upgrade. My siggy should show what I have.  I've banked with Chase forever, and would love a Chase Freedom, or a CapVenture, travel would be nice, rewards are great but I just upgraded my CapOneP to QS yesterday...

unless anyone has suggestions on what would be beneficial to my wallet. I have 2 derogs which will be falling off in a couple months, one loan that just started, no lates, just all new credit within the year.

Thanks for all your help, I really love this forum

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There's a lot of answers you'll get for each of these questions. My opinions on them are:

1. Some people get 5-figure limits because they may spend 5-figures in a month now and then. It can be embarrassing or inconvenient to have to split a purchase across two cards. As I'm sure have pointed out as well, one person's extremely high limit is another's toy limit. Also, limits shouldn't be correlated to debt levels so the last part of your question doesn't really make sense.

2. If it hurts, it's for a short time and for a small amount. More likely, you won't feel a thing when it closes as it stays on your report a while. By the time it falls off, you'll have built up much bigger factors than it.

3. The best cards to "upgrade" to are the cards that serve your needs best. You can hear people carry on all day about their cards, but if your spending and reward habits don't match theirs, that card isn't the best card for you.

[HeavenOhio]

Utilization has been mentioned a lot. 28.9% of one's limit or limits is considered responsible borrowing. You can exceed that amount from time to time, but you shouldn't be doing it every month.

People who frequent these forums know that 8.9% of one's limit is the number that optimizes one's score and that it's also optimum to report a non-zero balance on only one card. Some here have scores with enough of a cushion that optimizing isn't necessary. Some have scores that can benefit from optimization before applying for important credit, e.g. an auto loan or a mortgage. And some have scores on the low end that could benefit from being optimized almost all the time.

Also mentioned is that the need for credit limits is based on spending. People who routinely charge $20–$25,000 a month should have limits in the high 5-digits. Those who tend to spend $1,000 per month or less can get by with $5,000 limits.

I'm not personally concerned with my total available credit. I can keep my overall utilization in check easily enough. Plus, if I were spending 28.9% of my total credit limits routinely, I'd be spending beyond my means.

But I'm definitely concerned with individual card limits and their ability to absorb routine and non-routine charges. I spend more in some months than others, particularly in January and July. I want to be able to cover my high-spending months. If a need or opportunity arises during one of those months, I want a place to accommodate it. And I'd like some options just in case there's a problem with a card (like fraud protection kicking in). And if I'm able to keep a big fat charge from hitting my credit reports, that's even better.

For me, I think three cards with $15,000 limits would be good. I have one card that's well over that and one that comes close. At some point, I should be looking to add one more card with a limit in that range.

Beyond that, I can fill in a few gaps with a handful of cards with lower limits. I can look for rewards that are useful, a lack of foreign transaction fees, or whatever. But that's all optional. One more Visa or MasterCard with a decent limit is my priority at this point. Once some of my newer accounts age a little more, I'll be looking into that.

By the way, I do have the ability to pay for what I charge. The cash isn't necessarily going to be in my payment account, but I can get it there quickly enough. It's simply nice to see merchants getting their money immediately without causing myself undue inconvenience.

[Anonymous]

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@HeavenOhio wrote:

Utilization has been mentioned a lot. 28.9% of one's limit or limits is considered responsible borrowing. You can exceed that amount from time to time, but you shouldn't be doing it every month.

People who frequent these forums know that 8.9% of one's limit is the number that optimizes one's score and that it's also optimum to report a non-zero balance on only one card. Some here have scores with enough of a cushion that optimizing isn't necessary. Some have scores that can benefit from optimization before applying for important credit, e.g. an auto loan or a mortgage. And some have scores on the low end that could benefit from being optimized almost all the time.

Also mentioned is that the need for credit limits is based on spending. People who routinely charge $20–$25,000 a month should have limits in the high 5-digits. Those who tend to spend $1,000 per month or less can get by with $5,000 limits.

I'm not personally concerned with my total available credit. I can keep my overall utilization in check easily enough. Plus, if I were spending 28.9% of my total credit limits routinely, I'd be spending beyond my means.

But I'm definitely concerned with individual card limits and their ability to absorb routine and non-routine charges. I spend more in some months than others, particularly in January and July. I want to be able to cover my high-spending months. If a need or opportunity arises during one of those months, I want a place to accommodate it. And I'd like some options just in case there's a problem with a card (like fraud protection kicking in). And if I'm able to keep a big fat charge from hitting my credit reports, that's even better.

For me, I think three cards with $15,000 limits would be good. I have one card that's well over that and one that comes close. At some point, I should be looking to add one more card with a limit in that range.

Beyond that, I can fill in a few gaps with a handful of cards with lower limits. I can look for rewards that are useful, a lack of foreign transaction fees, or whatever. But that's all optional. One more Visa or MasterCard with a decent limit is my priority at this point. Once some of my newer accounts age a little more, I'll be looking into that.

By the way, I do have the ability to pay for what I charge. The cash isn't necessarily going to be in my payment account, but I can get it there quickly enough. It's simply nice to see merchants getting their money immediately without causing myself undue inconvenience.

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Great info, HeavenOhio, thank you for that. What cards do you have, if I may ask. Working towards 3 cards with $15K limits sounds like a good goal for me, just curious which ones to work on. IDK if CapOne CL's go that high and I'd like to focus on cards that will. I'm interested in a Chase Freedom, CapOne Venture I'm thinking about too but again, CapOne and cl's just not sure how high they go.

[Anonymous]

In our case we need high cl to keep utiz. down. We do pay in full 90% of the time. We don't have a stack of cards only use  ones that give rewards that benefit us: Amex BCP, Amex BC, Citi DC, Disco, Capt 1 QS, Capt 1 Spark and Chase Ink.  We have some older  non reward cards that are sd.  We own a biz that deals in big ticket items with us getting paid $5K to $10K at a time and some times the lead time can get long so we like the extra float as we incur expenses on the product starting with when the order is placed but don't get paid til delivery often 90 to 120 days after order.  Much of work is government contracts and requires us to have available  credit of 5 X the amount of the order.  

[HeavenOhio]

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@Anonymous wrote:
Great info, HeavenOhio, thank you for that. What cards do you have, if I may ask. Working towards 3 cards with $15K limits sounds like a good goal for me, just curious which ones to work on. IDK if CapOne CL's go that high and I'd like to focus on cards that will. I'm interested in a Chase Freedom, CapOne Venture I'm thinking about too but again, CapOne and cl's just not sure how high they go.

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AMEX BCE: $21,200

Capital One QS: $13,000

Barclays LL Bean Visa: $5,000

Chase Amazon Visa: $4,000

Capital One QS: $3,800

Capital One QS:$3,700

Regarding Capital One, many here get stuck in Low Limit Land on their first cards with them, but then they do very well by applying for new cards. I've had my three cards forever. Obviously, one of them grew and two of them haven't. However, I never ever requested CLIs on those cards until this year. I just took what they gave me. Each of the three cards has been increased twice this year: the larger limit card has had two $3,000 increases, and the lower limit cards have have had two $1,000 increases. I wouldn't be surprised to see a repeat of the same increases the next time I'm eligible to apply again, but I woudn't expect that to last forever.

The Barclays card isn't that useful outside of shopping at LL Bean. It gets some non-category spend just to justify its existence. But mostly, I'm leaving Barclays alone and hope they reciprocate by leaving me alone. It's a capable backup if I need to use it that way occasionally.

The limit on the Amazon Visa is low because I applied for it at a bad time. Chase hates new accounts. I had opened two of them within the previous six weeks, and one of them was maxed. They increased me after four months, though. I may take a hard pull and request a CLI at some point. But I'm waiting to see if they auto-increase me again, partly to avoid the inquiry and partly for the data point. Chase seems to want me now, though, despite the fact that I'm at 5/24. I have an offer for double the signup bonus on a Freedom Unlimited. I don't see that card as a good fit for me at this time, though.

AMEX has been great. They started me at $15,000 and increased me at 61 or so days. I've only had one month of fairly big spending on it. Otherwise, I'm generally in the $1,200—1,300 range. This is the one case where I'll ask for a CLI only because I'll probably get it.

[Anonymous]

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@Anonymous wrote:

Great info, HeavenOhio, thank you for that. What cards do you have, if I may ask. Working towards 3 cards with $15K limits sounds like a good goal for me, just curious which ones to work on. IDK if CapOne CL's go that high and I'd like to focus on cards that will. I'm interested in a Chase Freedom, CapOne Venture I'm thinking about too but again, CapOne and cl's just not sure how high they go.

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I have a Chase, CapitalOne, and Amex card with more than 15k for the starting line. CapitalOne Venture seemed to be the 'easiest' out of all of those to get approved at that level. All three of those vendors offer account combination, and Amex has a pretty open SP CLI policy.

Good luck with your quest!

[Anonymous]

HO, do you really have 3 CO QS cards?  I'm curious if so how you managed that?

[HeavenOhio]

I responded to three separate offers after the turn of the millennium and got three cards. Eventually, the card that grew product-changed into a QS. The other two PC'd into QS1s and were recently PC'd into QSs.

I don't need three of the same card, but these cards are so much older than my other cards that I'm not going to close or combine. Because the rewards are the same on all of them, it's no biggie to throw some spending at the lower-limit cards to try to coax CLIs.

If Cap One started offering product changes to the dining card and the offer appeared on one of my lower limit cards, I'd grab it in a heartbeat. I definitely woudn't want more than one dining card, though. And I'd rather that the card with the highest limit remain a QS.

[Anonymous]

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@HeavenOhio wrote:

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@Anonymous wrote:
Great info, HeavenOhio, thank you for that. What cards do you have, if I may ask. Working towards 3 cards with $15K limits sounds like a good goal for me, just curious which ones to work on. IDK if CapOne CL's go that high and I'd like to focus on cards that will. I'm interested in a Chase Freedom, CapOne Venture I'm thinking about too but again, CapOne and cl's just not sure how high they go.

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AMEX BCE: $21,200

Capital One QS: $13,000

Barclays LL Bean Visa: $5,000

Chase Amazon Visa: $4,000

Capital One QS: $3,800

Capital One QS:$3,700

Regarding Capital One, many here get stuck in Low Limit Land on their first cards with them, but then they do very well by applying for new cards. I've had my three cards forever. Obviously, one of them grew and two of them haven't. However, I never ever requested CLIs on those cards until this year. I just took what they gave me. Each of the three cards has been increased twice this year: the larger limit card has had two $3,000 increases, and the lower limit cards have have had two $1,000 increases. I wouldn't be surprised to see a repeat of the same increases the next time I'm eligible to apply again, but I woudn't expect that to last forever.

Are you able to combine your Cap One QS's? Combine the 2 lower balances to 1 or combine all 3? That would help your goal is to have 3 cards with substantial balances. I'm sure you've thought about this already, just a question I guess on my end. Thank you btw, this forum has been such a learning tool. Also I didn't realize that CapOne gave such high CL's so this gives me hope (my cl is $750, I opened the acct in January).

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